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Most Expensive States to Live In U.S

The most expensive states to live in the U.S. include Hawaii, California, and Alaska, with factors such as high housing costs, elevated taxes, and increased living expenses contributing to their higher overall cost of living.

by Tamilchandran

Updated Jan 04, 2024

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Most Expensive States to Live In U.S

Most Expensive States to Live In U.S.A.

In the United States, the most expensive state to live in is Hawaii, where residents spend about 50% more than the national average on monthly expenses, totaling around $3,070. This high cost of living in Hawaii is attributed to elevated expenses such as rent, which surpass even those in notoriously expensive areas like New York City, and higher utility costs, averaging $633 compared to New York's $384 per month.

The ranking is determined by analyzing various common expenses, including mortgages, rent, utilities, auto loans, auto insurance, cable and internet, mobile phones, health insurance, alarm and security, and life insurance across states.

Here is a list of the top 10 most expensive states to live in the USA, considering factors like housing costs, grocery prices, transportation expenses, and healthcare costs. The rankings are based on the median sold price of homes and indices for various living expenses in each state.


Median Sold Price

Grocery Items Index

Transportation Index

Health Care Index


























New Hampshire















New York










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What State is the Least Expensive to Live in U.S.A.?

Mississippi takes the title as the least expensive state to live in the United States, with a cost of living index score of 83.3. It is particularly affordable due to the lowest average housing costs nationwide, approximately 33.7% below the national average, with a median single-family home priced at around $140,818.

However, it's essential to note that economic challenges, a struggling education system, and a relatively low overall quality of life contribute to Mississippi also being ranked among the worst states to live in, with the highest poverty rate in the country at 19.5%.


Median Home Price

Median Monthly Rent*

Median Household Income

Unemployment Rate
















West Virginia



































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Why is Hawaii Considered the Most Expensive U.S. State to Live in?

Hawaii holds the title of the most expensive state in the United States, primarily attributed to its high cost of living index of 193, nearly double the national average. Here's why:

Breathtaking Beauty and Limited Land

The state's stunning scenery and restricted land for development contribute to astronomical median home sale prices, second only to California.

High Housing Costs

With an average single-family home price nearly $1 million, housing in Hawaii is a significant contributor to the overall high cost of living.

Geographical Isolation

The islands' isolation results in increased expenses for shipping essential goods, such as food, clothing, and household items, from the mainland.

Inflation Impact

The ongoing impact of inflation is further driving up costs across various aspects, including housing and healthcare, making Hawaii the most expensive state to reside in.

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Why is California's Cost of Living High Despite Its Economic Success?

California is one of the most prosperous states in the United States, boasting a GDP of over $3 trillion. However, its cost of living is 23.5% higher than the national average. Several factors contribute to this disparity:

Expensive Housing Market

The state's housing market is among the most costly nationwide, with a median home price exceeding $700,000. High demand, limited supply, and strict zoning laws contribute to this situation.

High State Income Tax

California imposes the highest state income tax rate in the country, standing at 13.3%, placing an additional financial burden on residents.

Elevated Sales Tax

With the highest sales tax rate in the nation at 7.25%, Californians face increased costs on goods and services.

Costly Healthcare

The average cost of health insurance in California exceeds $500 per month, contributing to the overall higher cost of living.

Regulatory Environment

Stringent environmental regulations and labor laws in California increase operational costs for businesses, subsequently leading to higher prices for consumers.

Why Alaska's Cost of Living Higher Than the National Average?

Alaska, being the largest state with one of the lowest populations, results in a sparsely distributed populace. While this offers privacy, it necessitates residents and delivery services to cover large distances, leading to higher transportation costs and the sixth-highest gas prices in the United States. Alaska's cost of living index is 127, surpassing the national average of 100. Here's why:

Geographical Isolation

Alaska's distance from the mainland contributes to increased costs for deliveries, primarily relying on air travel, which is more expensive than traditional ground transportation. Many logistics companies impose additional surcharges for deliveries to Alaska due to the geographical distance.

High Healthcare Costs

The cost of healthcare in Alaska is elevated, with an average health insurance expense exceeding $500 per month. This adds to the overall cost of living for residents.

Stringent Environmental Regulations and Labor Laws

Alaska's rigorous environmental regulations and labor laws make it more costly for businesses to operate. These additional expenses for businesses can translate into higher prices for consumers, contributing to the state's elevated cost of living.

How To Save Money in a High-Cost-of-Living Area?

Start by creating a budget to track expenses and identify areas for cutbacks. Utilize free budgeting tools like Mint or Personal Capital to streamline the process. Living in a high-cost-of-living area can be daunting, but there are practical ways to save money:

Reduce Grocery Bills

High living costs often extend to dining out. Save money by cooking at home, buying groceries in bulk, and hunting for deals or coupons.

Use Public Transportation

In cities with robust public transportation, opt for buses or trains instead of driving. This choice can lead to savings on gas, parking, and vehicle maintenance.

Explore Free Activities

Take advantage of free local activities such as concerts, festivals, and museums. High-cost regions often offer cultural experiences without a hefty price tag.

Consider Moving

 If financial challenges persist, explore the possibility of relocating to a lower-cost-of-living area. Online cost-of-living calculators can assist in comparing living expenses in different cities

Most Expensive States to Live in-FAQs

1. What is the Most Expensive State to Live in?

Hawaii is the most expensive state to live in in the United States with a cost of living index of 193 which is almost twice the national average. 

2. What factors make Hawaii the most expensive state to live in?  

Hawaii's distinction as the most expensive state to reside in can be attributed to a combination of unique geographical and economic factors. 

3. Why does California have such a high cost of living?

California's reputation for a high cost of living is rooted in a nexus of factors driven by its economic dynamism and innovation. 

4. What makes Alaska's cost of living significantly higher than the national average?  

Alaska's position as one of the most expensive states to reside in is underpinned by a blend of distinctive geographic and logistical elements.

5. Why is Massachusetts considered one of the states with the highest cost of living?

Massachusetts' reputation for a high cost of living is a product of various interconnected factors. The limited availability of single-family homes contributes to a higher median home sale price, especially in areas with strong demand. 

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